The Fastest-Growing (and Slowest-Growing) U.S. Metro Areas in the Race for Amazon HQ2

Sometime this year, e-commerce giant Amazon is expected to reveal a decision that will dramatically reshape one Northern American metro area.

Seattle, WA-based Amazon is considering 20 finalists for its second headquarters, nicknamed HQ2. The $5 billion project promises to generate as many as 50,000 jobs and gobble up more than 8 million square feet of office space.

A total of 16 U.S. metro areas are in the HQ2 mix. Only one metro area outside the U.S. — Toronto, Canada — is in the running for HQ2. The New York City, NY, metro area has two HQ2 candidates, and the Washington, DC, area has three.

Whichever metro area gains HQ2 is bound to see explosive population growth, thanks to the thousands of new jobs being created. As we await Amazon’s choice, we were eager to find out which of the 16 HQ2 metros in the U.S. are already seeing explosive population growth.

Pros and cons for Austin

William Mellor, vice president of AngelouEconomics, aneconomic development consulting firm based in Austin, says that in the context of HQ2, the Austin area’s rapid population growth is a mixed blessing.

“Austin is relatively small compared to other metros on the HQ2 shortlist. In some ways, that puts Austin at a disadvantage, because HQ2 would consume a proportionally larger share of the economy and available workforce,” Mellor says.

“However,” he adds, “no metro in the country will be able to seamlessly absorb 50,000 jobs…In that regard, the fastest-growing metros will have the advantage because substantial growth will be the only way that any metro area will be able to accommodate HQ2.”

Austin and other fast-growing HQ2 contenders will be magnets for people who want to work at Amazon’s new corporate campus, according to Mellor.

“In order for Amazon to scale HQ2, it will require hiring within the local labor pool but also recruiting from other parts of the country or even internationally. It is easier to recruit top talent to places where quality of life is high. These cities — Austin included — tend to have high growth rates,” Mellor says.

“The primary driver of business location decisions is labor,” he adds. “It becomes a positive feedback loop of businesses wanting to be in markets where top talent wants to be, and high quality of life combined with increased economic opportunity make the city an increasingly attractive place to live.”

Housing challenges ahead

Daren Blomquist, senior vice president of ATTOM Data Solutions, an Irvine, CA-based provider of real estate data, says that regardless of how fast an HQ2 metro is expanding, the addition of thousands of jobs will strain the local housing market.

“For fast-growing markets like Austin, Raleigh, Dallas-Fort Worth, Nashville and Denver,” Blomquist says, “the challenge will be providing enough housing for the influx of Amazon employees without having home prices become unaffordable for folks already living there but not making high-tech Amazon wages — folks such as teachers, plumbers and police officers.”

Slower-growing or declining markets such as Chicago, Los Angeles, New York, Philadelphia and Pittsburgh will face a similar challenge, Blomquist says, but they’ll also struggle to provide enough high-quality housing in low-crime neighborhoods with good schools — neighborhoods that would attract well-paid Amazon workers.

Of course, Blomquist notes, given that all of these metros chose to pursue Amazon HQ2, “policymakers in each of these markets consider gaining an additional 50,000 high-paying jobs a good challenge to have.”

What follows are the 2010-17 population figures for the 16 U.S. metro areas chasing Amazon HQ2.